“On the monetary front, we do not see reason for further reductions of the policy rate and we are ready to ensure the flexibility of our inflation targets having in mind the pretty elevated debt levels. With respect to the exchange rate, we stand ready to ensure more flexibility having in mind its role as anchor of social trust in the case of Romania,” Isarescu said in his speech at the IMF Regional Economic Outlook: Europe conference held on April 12.
Romania’s central bank lowered the monetary policy rate successively from 2.5% in March 2020 to 1.25% at present.
Isarescu added the central bank used its entire toolkit to provide liquidity to banks by reinstating regular repo operations and purchasing government bonds on the secondary market.
The central bank currently targets inflation at 1.5%-3.5%. Its latest forecast sees inflation at 3.4% at the end of 2021.
Annual inflation in Romania reached 3.05% in March.